Download This PaperCost-Benefit Analysis
Encyclopedia of Environmental Law: Environmental Decision Making (Robert L. Glicksman, et al., eds.) (Elgar, 2016 Forthcoming)
17 Pages Posted: 6 Sep 2016 Last revised: 8 Oct 2016
Date Written: August 29, 2016
Abstract
Cost-benefit analysis (CBA) is one of three criteria by which the goals of environmental regulation can be set. (The other two are feasibility and health-based standards.) The term refers to any decision-making technique that weighs and compares the costs and the benefits of a course of action, and can range from an informal weighing of qualitatively described pros and cons to a highly formal and technical method that employs sophisticated mathematics and is grounded in economic theory. This more formal, economic version of CBA has sparked considerable controversy since its inception in the mid-twentieth century. But despite ongoing debate as to its validity and usefulness, in the 1980s, the US government began using a relatively formal version of CBA as a tool for centralized regulatory review. Since then, controversy has continued even as the idea of CBA as a tool for regulatory review has begun to spread to other parts of the world.
Keywords: cost-benefit analysis, environmental economics, environmental law, environmental regulation, regulatory review
JEL Classification: K23, K32
Suggested Citation: Suggested Citation